The Language of a Purchase and Sales Contract
It is very important that you know exactly what you are agreeing to do when you are completing your purchase and sales contract. If you are following the steps outlined in my book then there is simply no reason why you should be blind-sided by anything that is written in your contract, but just to make sure, I will go over the basic terms and definitions.
- Parties - You and the sellers name and contact information.
- A legal description of property - Explains exactly what you're buying and how the city officially views the property.
- Offer or purchase price of property - How much you agree to pay for the property.
- The date of the contract - The date you signed the contract.
- The closing date - The date you and the seller are expected to transfer payment and ownership to each other.
- Down payment amount - The amount you will contribute towards the purchase price in the form of cash or down payment assistance.
- The terms of any escrow agreement - The exact actions and or professional services used in order to hold the deposit money and perform certain services.
- Contingencies - Conditions to be met before transferring money and ownership.
- Title Condition - The agreement that the seller will be able to sell a clear and trouble-free title of ownership to you.
- Loan amount and conditions - How much you are borrowing from a lender and the terms of your mortgage.
- Resolving disputes - How you and the seller will handle any issue which arises and cannot be resolved peacefully.
- Personal property and fixtures - What is included with the house when you buy it.
- Usage rights - What exactly you own and can use when you buy the property - more of an issue when buying condos, town homes and co-ops.
- Payment to agent - The amount the real estate agents are getting compensated.
- Additional Fees - Covers various fees such as title insurance, deed preparation fees, notary fees, transfer taxes, escrow fees, title search fees etc.
- Escrow holder - The party holding the deposit funds.
- Assessments and pro-rations - Details how the yearly taxes the sellers may have already paid, mortgage interest etc. will be paid and by whom.
- Contract expiration date - When the contract expires and is no longer legally binding.
- Damage to property - Details what will happen if the house is damaged or destroyed while in escrow or under contract with you before closing.
- Possession - When the seller will move out and you can move in.
- Time is of the essence - You and the seller must have the closing before the expiration date or the contract is null and voided.
- Seller representations - Details the promise the seller states to be true about the condition of the house you are buying.
- Entire agreement - Statement insuring that the purchase and sales contract is the only agreement between you and the seller.
- Signatures - The final action that makes the contract legally binding.
Park Avenue Properties
Tanya Stevenson-Becht & Sandy Daniels
office@parkavehomes.net
